DCJ v DAH[2009] QSC 54

SUPREME COURT OF QUEENSLAND

[1] This is an application for property adjustment orders under Part 19 of the Property Law Act 1974 (“PLA”).

The relationship

[2] The applicant was born in 1967 and the respondent was born in 1962.

[3] The applicant’s case is that the parties were in a de facto relationship from about the middle of September 2003 until 1 January 2006. The respondent, in his first affidavit, admitted the de facto relationship but said it commenced in December 2003 and concluded on 11 March 2005. On that basis, the respondent says that the application, having been filed on 23 April 2007, is out of time.

[4] Section 288 of the PLA provides:

“(1) A court may make a property adjustment order only if –

(a) the application was made within 2 years after the day on which the de facto relationship ended; or

(b)the court has given the applicant leave to apply.

(2)The court may give leave only if it is satisfied hardship would result to the applicant or a child of the de facto partners if leave were not given.”

[5] If the respondent is correct, then the court could not make an order (in the absence of the considerations in s 287(b) and (c)) as the relationship did not subsist for at least two years. Section 287 provides:

“A court may make a property adjustment order only if it is satisfied –

(a)the de facto partners have lived together in a de facto relationship for at least 2 years; or

(b)there is a child of the de facto partners who is under 18 years; or

(c) the de facto partner who applied for the order has made substantial contributions of the kind mentioned in section 291 or 292 and failure to make the order would result in serious injustice to the de facto partner.”

[6] The applicant says she is able to date the commencement of the relationship from the time at which she moved into the property (which is the only property of any substance in this application) at 4 Turnbull Road, Wamuran. She says she can recall this because her sister assisted her to move from her then residence into the Wamuran property and she was able to do that because her children were at school during the day. Her sister gave evidence and said that the move took place shortly before the commencement of the September school holidays in that year.

[7] The respondent, in his first affidavit, said that the relationship commenced in December 2003. In oral evidence he said it commenced in mid November 2003.

[8] The applicant says that the relationship concluded on 1 January 2006 when she left the Wamuran property for the last time. The respondent says that the relationship concluded on 11 March 2005 and he relates that date to the time at which he informed Centrelink that he was no longer “partnered”. Exhibit 12 is a letter from Centrelink to the respondent showing that from the period 1 July 2004 to 11 March 2005 he received payments of his parenting pension on the “partnered rates” whereas after that last date he received his parenting pension payment at the single rate.

[9] I accept the evidence of the applicant as to the date on which the relationship commenced. I do not doubt that the relationship which existed between the parties was one of a de facto marriage and the only circumstance which needs to be considered is when the relationship terminated. The respondent gave evidence in which he claimed that the applicant had, in fact, been a boarder and that payments she made towards the loan taken out for the property were nothing more than rent. I do not accept that. The evidence was that she remained on the property living with the respondent, sharing a bedroom and the domestic tasks until sometime in August 2005 when there was a brief separation. She returned some two months later and the relationship continued until she finally left on 1 January 2006. I find, then, that the relationship existed from mid-September 2003 until 1 January 2006. The application is in time and the period of the relationship (whether the separation is taken into account or not) exceeded two years.

[10] The respondent was not represented at any stage. He did not comply with the relevant Practice Direction and the affidavits which he did file were of limited assistance. He provided no evidence with respect to his current financial circumstances.

The property

[11] Prior to the de facto relationship commencing, the respondent had lived at the Wamuran property for some 10 years as a tenant together with his three children. He said, and I accept, that he had a good relationship with the landlord.

[12] The parties commenced an initial relationship sometime in March 2003. They did not then live together but they did make plans to purchase a property for them to live in. In or about June 2003, the parties dealt with an officer of the Commonwealth Bank at its Caboolture branch. In a letter from that officer to the parties the author says:[1]

“Thank you for discussing with me how Park and Hold can help you purchase your next property. Your deposit details, pending the purchase of your new property, are detailed below.”

[13] The details that are contained in the letter show the names of both parties, the type of account (Cash Management), the account number, the deposit amount ($21,000) and the deposit date (16 June 2003).

[14] The letter goes on to say:

“If you have not already done so, we recommend that you complete an application for a Home Seeker Loan as this will give you added peace of mind and confidence when searching for your new property. Providing your application meets with our requirements, we will grant you ‘in-principle’ approval.”

Further details are then given of the costs of setting up home loans and lines of credit.

[15] It appears that discussions were had about possibly buying a property at Hervey Bay but, in the end, the respondent entered into a contract to purchase the property at Wamuran. Before that could be done, though, the property had to be subdivided as this was a requirement of the landlord who was, of course, the vendor. The subdivision was effected by the respondent. He engaged surveyors and he paid the requisite amounts to the local authority for that purpose. The development application was approved on or about 27 August 2003. I find that the respondent made payments in order to cause the subdivision to be effected. Those payments were:

Caboolture Shire Council $11,974

O'Reilly Nunn Favier, Surveyors$  2,760

Total $14,734

[16] The respondent said, and I accept, that the property was able to be sold to him at a favourable price because of his longstanding relationship with the landlord and because he was able to effect the subdivision.

[17] On 9 September 2003 the respondent entered into a contract to purchase the property at Wamuran. It was subject to finance being approved within 14 days. The purchase price was $140,000 and the deposit was $14,000.

[18] On 24 September 2003 the applicant was informed by the Commonwealth Bank that a loan to her and the respondent had been approved in the sum of $112,000. When that notification was given the applicant was also sent a mortgage for her to execute. She did execute that mortgage but, as she was not a registered proprietor of the land, the mortgage which was eventually lodged only showed the respondent as the mortgagor. The applicant’s name and signature was struck out. Nevertheless, the applicant remained a party to the loan agreement until some time in early 2006 when that loan was paid out pursuant to refinancing arranged by the respondent.

[19] The correspondence from the bank to the parties and the fact that the applicant entered into a loan agreement to assist with the purchase of the property is consistent with the de facto relationship I have found to exist and does not support the assertion by the respondent that the applicant was at some stages a mere boarder.

[20] The sum of $21,000 which had been paid into the cash management account in June 2003 was, I find, constituted by $11,000 from the applicant and $10,000 from the respondent. A further sum of $7,600 was also deposited into the cash management account on 3 September 2003.

[21] The respondent suggested, during cross-examination, that part of the purchase price was paid for with a $7,000 first home owner grant from the Commonwealth Government. The applicant was not certain as to how money was used for the costs associated with the purchase but she said that of the $7,600 deposited in September she contributed $4,000. There was no evidence of the payment of the first home owner’s subsidy. On 18 September 2003 the cash management account in the name of both parties had a credit balance of $10,302.60. The parties had, by that time, deposited $28,600 into that account. The deposit on the property was $14,000 and the amount borrowed was $112,000 which left an amount of $14,000 which had to be paid to the vendor. I cannot, on the material before me, determine how that amount was paid to the vendor and whether it was by the Commonwealth subsidy or through some other amount. There is a withdrawal from the cash management account of $7,000 on 9 October that may have been a payment to the vendor. It is not clear. It is clear, though, that on 16 October loan repayments commenced and in each week two payments were made, one of which came from an account in the name of the applicant. The applicant ceased to make payments under the loan agreement when she left the Wamuran property in August 2005. She recommenced making payments when she returned some two months later.

Considerations

[22] Section 286 of the PLA provides:

“286 Court may make property adjustment order

(1)A court may make any order it considers just and equitable about the property of either or both of the de facto partners adjusting the interests of the de facto partners or a child of the de facto partners in the property.

(2)In deciding what is just and equitable, a court must consider the matters mentioned in subsubdivision 3.

(3)It does not matter whether the court has declared the title or rights in the property.

(4)In this section –

adjust, for interests of persons in property, includes give an interest in the property to a person who had no previous interest in the property.”

[23] Section 291 of the PLA provides relevantly:

“291 Contributions to property or financial resources

(1)The court must consider the financial and non-financial contributions made directly or indirectly by or for the de facto partners or a child of the de facto partners to--

(a)the acquisition, conservation or improvement of any of the property of either or both of the de facto partners; and

(b)the financial resources of either or both of the de facto partners.

(2)However, the non-financial contributions of a child of the de facto partners must be considered only if the child's contributions are substantial.

(3)It does not matter whether the property or financial resources mentioned in subsection (1) still belong to either or both of the de facto partners when the court is considering the contributions made.”

[24] Section 292 of the PLA provides relevantly:

“292 Contributions to family welfare

(1)The court must consider the contributions, including any homemaking or parenting contributions, made by either of the de facto partners or a child of the de facto partners to the welfare of--

(a)the de facto partners; or

(b) the family constituted by the de facto partners and 1 or more of the following--

(i)a child of the de facto partners;

(ii) a person who is--

(A)accepted by either of the de facto partners into the household of the de facto partners; and

(B)dependent on either of the de facto partners.

(2) However, the contributions of a child of the de facto partners must be considered only if the child's contributions are substantial.

Example--

A de facto couple own and live on a farm. They have twins, a boy and a girl. The twins always lived on the farm. After the twins left school, the parents bought 2 additional farms. The son then worked on the farms for no wages assuming, in time, 1 of the farms would be his. The daughter looked after the family's home for no wages assuming, in time, 1 of the farms would be hers. In both cases, the children did much more than the household chores (such as mowing the lawn and doing the dishes) that a family might normally expect of family members. When the children were 31 years, the parents separated.

The son's contributions are substantial and would be considered under section 291. The daughter's contributions are also substantial and would be considered under this section”

[25] In FO v HAF the Court of Appeal summarised the other considerations which must be taken into account in the following way:[2]

“A court must also consider, to the extent that they are relevant in deciding what order adjusting interests in property is just and equitable:

•‘the age and state of health of each of the de facto partners’ (Section 297 of the PLA);

• ‘the income, property and financial resources of each of the de ‘facto partners’, and ‘the physical and mental capacity of each of them for appropriate gainful employment’ (Section 298 of the PLA);

•‘whether either de facto partner has the care of a child of the de facto partners who is under 18 years’ (Section 299 of the PLA);

•‘the contributions made by either of the de facto partners to the income and earning capacity of the other de facto partner’; (Section 304 of the PLA).

•‘the length of the de facto relationship’ (Section 305 of the PLA);

•‘the extent to which the de facto relationship has affected the earning capacity of each of the de facto partners’ (Section 306 of the PLA); and

•‘any fact or circumstance the court considers the justice of the case requires to be taken into account’ (Section 309 of the PLA).

[26] The Court of Appeal went on to say:[3]

“It has frequently been emphasised that the judicial discretion conferred by s 286(1) of the PLA and its analogues in other statutes should not be constrained by pre-determined guidelines. (Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513; In the Marriage of Lenehan [1987] Fam CA 8; (1987) 11 Fam LR 615; Kardos v Sarbutt [2006] NSWCA 11 at [51]; (2006) 34 Fam.L.R. 550 at 564.) It is essential, however, that the matters referred to in the provisions set out above be taken into account, and that they are "seen, in the reasons for judgment, to have been taken into account". (Davut and Raif [1994] FLC 92-503 at 81,237.) To this end, the four step approach explained by the Full Court of the Family Court in Hickey v Hickey ([2003] Fam CA 395; [2003] FLC 93-143 at 78,386, cf Kardos v Sarbutt [2006] NSWCA 11 at [28]–[29]; (2006) 34 Fam.L.R. 550 at 558) provides a useful discipline to ensure clarity of thought and transparency of judicial reasons.”

[27] The four step approach referred to above consists of the following steps:

(a) the identification and valuation of the property, resources and liabilities of the parties;

(b) the identification and assessment of the contributions of the parties to their pool of assets and the determination of their contribution-based entitlements in accordance with sections 291-295 of the PLA;

(c) the identification and assessment of the factors in sections 297-309 of the PLA to determine the adjustment of the contribution-based entitlements; and

(d) consideration of the result of the earlier steps to determine whether that result was just and equitable in accordance with s 286.

Identification and valuation of property etc

[28] The applicant is unemployed, has no assets of any significance, and is currently living with her sister on a rent-free basis.

[29] As noted above, the respondent did not comply with the Practice Direction and file material setting out his financial circumstances. It appears that he is still on a pension. He is living at the property. He was able to obtain a facility to refinance the loan in February 2006. He paid out the loan which was originally in joint names. Apart from that, there is no other information before the court.

[30] The only property which is of any value is the property at Wamuran. The applicant relies upon a valuation by Andrew Grams, a registered valuer. He was unable to inspect the improvements on the property but that is not of great moment. The respondent admitted that the improvements are of little value and in poor condition. This is a situation where the value is in the land, rather than any improvements. His evidence was that the property had a fair market value of $750,000. There is nothing to contradict that. It seems reasonable given the analysis in his valuation and I adopt it.

Contributions of the parties

[31] This is a relatively simple exercise given the limited amount of property involved.

[32] The applicant contributed $15,000 ($11,000 + $4,000) to the purchase of the property and made loan payments of $9,820. That is a total of $24,820.

[33] I consider that the amount paid by the respondent for subdivision should be taken into account as I accept that the property would not have been able to have been purchased without that process being undertaken. He contributed $28,334 ($14,734 + $10,000 + $3,600) towards the purchase of the property and made payments on the loan account of $13,890. That is a total of $42,224.  He did withdraw, at some stage, $2,000 during the relationship but that was not made known to the applicant.

[34] In February 2006 the respondent refinanced the loan and, at about that time, deposited $15,000 into the account of the applicant. She says that she had no notice of that money being paid in and did not know how the respondent had her bank account details.

[35] The respondent says that that amount was paid in because it was pursuant to an arrangement that the parties had whereby the money that the applicant contributed to the purchase of the property was really only a loan to the respondent. That is, in my view, a fabrication on the part of the respondent. He did not make any mention of it in either of his affidavits nor did he raise it with the applicant during cross-examination. It also does not sit with the fact that both parties were liable under a loan agreement for the purchase of the property. It is relevant to note that the respondent told the applicant that her name would not be on the title because he did not wish to confuse the vendor and that her name could be placed on the title after purchase for a small amount of money. The latter of course is not correct but the version given by the respondent is not one which can be accepted.

The needs factors

[36] There is little to distinguish the parties under this heading. They are both of about the same age and there was no evidence to suggest that either was in ill-health.

[37] The applicant has no other income, property or financial resources and the respondent has not provided any evidence on that question. The respondent has not been in employment for at least a decade and, it appears, prior to that he had worked as a farm labourer. The applicant did not give any evidence which would allow me to draw any conclusion as to her prospects of employment.

[38] Neither made any contribution, nor in the circumstances could they, to the income and earning capacity of the other.

[39] The applicant said that the domestic chores were divided so that she did the work “inside the house”, such as cooking, washing and cleaning; while the respondent did the work “outside the house”, such as mowing and maintenance. The respondent disputed that and said that he did nearly all the work himself. During the relationship the applicant was in work and the respondent was not. I think it more likely that the respondent did do a substantial part of the work both inside and outside the house.

[40] An important point is the length of the relationship. It was barely over two years in duration and, for part of that, was the subject of a two months separation.

Property adjustment

[41] The applicant has sought an order which, effectively, would result in the split of the property 50:50. That does not, I think, give sufficient recognition to the part played by the respondent in obtaining the property at a favourable price and then, through subdivision, putting it into a situation where it could be purchased. The contribution by the respondent (both initial capital contribution and loan repayment) over the period of the de facto relationship was nearly twice that of the applicant. He has, of course, now full responsibility for the loan on the mortgage. The amount owing on that loan is now greater than the amount which was owed on the earlier loan at the time of the cessation of the relationship. Taking into account all those factors, I am of the view that the most appropriate distribution of property is 66 per cent of the net value of the Wamuran property (after discharging any securities on the property and paying the costs of sale) to the respondent and the balance to the applicant.

[42] The applicant is to bring in draft minutes of order which will reflect the finding above. I also declare that:

(a) the parties were in a de facto relationship during the period September 2003 to 1 January 2006,

(b) each party retains all other property which they currently possess and indemnifies the other in respect of any liabilities with respect to that property.

[43] Section 341 of the PLA provides that a party to a proceeding of this type bears the party’s own costs. A different order can be made if the court is satisfied that there are circumstances justifying such an order. The applicant seeks her costs and points to the failure by the respondent to comply with the Practice Direction, amongst other things. The failure to comply with the Practice Direction is important but I have to recognise that the respondent is not represented. I do not regard the circumstances of this case as being of a nature that would require a different order being made.